Confrontational Politics Can Be Good for All Sides

Nuance, subtlety and appeals to reason weren’t cutting it. So when it came to trying to break gridlock on the confirmation of a director of the Consumer Financial Protection Bureau, Obama did it the old fashioned way: He picked a fight.

He took an expansive view of what constitutes a congressional recess and appointed Richard Cordray to run the CFPB after Senate Republicans repeatedly thwarted his efforts to get Cordray confirmed. Unfortunately, Obama didn’t channel former President Clinton and say, “it all comes down to what the definition of recess is.”

It remains to be seen whether the courts will uphold Obama’s action, but until then, it will be the latest chapter in the perennial fight between the executive and legislative branches.

In the words of that well-known separation of powers expert Martha Stewart, “it’s a good thing.”

For credit unions, providing the CFPB full powers to regulate payday lenders and other nonbank competitors is likely to be a net plus.

And those who like their government served with a heavy side of gridlock are in for a large serving of divided government, certainly for the next year and quite possibly after that.

At its best, divided government can create compromises that amount to good policy outcomes, such as some of the civil rights legislation of the 1950s and 1960s and the 1986 tax reform. At its worst, it can cause both parties to be intransient and only pass the minimum of legislation needed to keep the government running, as happened last year.

Another advantage to gridlock is that it often requires both parties to be more sophisticated in their strategizing.

That’s good for the many political buffs who are also sports fans. One of the joys of watching two outstanding baseball teams (say the New York Yankees vs. the Boston Red Sox) is not only do you get to see first-rate players but also see the effectiveness of the dueling strategies.

Fortunately, for all those who love a good fight, there is likely to be gridlock, more gridlock and even more gridlock.

Even if Obama is re-elected (and his chances of doing that are improving with every positive economic report), chances are he will have to govern in a second term with at least one chamber of Congress controlled by the GOP.

Most handicappers predict the GOP will keep control of the House, although the Democrats might gain a few seats in that chamber. There are 242 Republicans, 192 Democrats and one vacancy in the House.

The Senate is controlled by Democrats, though most seats that are likely to change hands are in areas that favor Republicans. One of the Democrats’ best pick up opportunities is in Massachusetts where Harvard Law School professor Elizabeth Warren, who conceived of and set up the CFPB, is the likely nominee against Sen. Scott Brown (R-Mass.). Currently, there are 51 Democrats, 47 Republicans and two independents who caucus with the Democrats.

Even if the Democrats keep their majority in the Senate, a re-elected Obama would have to fight for anything he wants in that chamber. One is reminded of the comment of then-Senate Minority Leader Bob Dole (R-Kan.) when Clinton was first elected in 1993. “The good news is that he's getting a honeymoon in Washington. The bad news is that Bob Dole is going to be chaperone.”

That’s why CUNA and NAFCU are making sure that they continue to be in the good graces of those on both sides of the aisle with the hope that it will help them further their agenda next year.